MIDDLESEX WATER CO — Proxy Solicitation & Information Statement 2009

Apr 8, 2009

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant þ

Filed by a Party other than the Registrant o

| Check
the appropriate box: | |
| --- | --- |
| o | Preliminary
Proxy Statement |
| o | Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
| þ | Definitive
Proxy Statement |
| o | Definitive
Additional Materials |
| o | Soliciting
Material Pursuant to §240.14a-12 |

| Middlesex
Water Company |
| --- |
| (Name
of Registrant as Specified In Its
Charter) |

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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1500 Ronson Road P.O. Box 1500 Iselin, New Jersey 08830-0452 NASDAQ Stock Market Symbol: MSEX April 8, 2009

Dear Shareholder:

You are cordially invited to attend Middlesex Water Company’s Annual Meeting of Shareholders. The meeting will be held on Wednesday, May 20, 2009 at 11:00 a.m. at the office of the Company, 1500 Ronson Road, Iselin, New Jersey.

At the meeting, you will be asked to elect three directors. In addition to specific matters being voted on, management will report on company activities during 2008 and our outlook and goals for 2009. We welcome this opportunity to meet with our shareholders and look forward to your comments and questions. Information about the meeting is presented in the following Notice of Annual Meeting of Shareholders and Proxy Statement which you are urged to carefully read.

Please note: This year we are utilizing new U.S. Securities and Exchange Commission rules that allow us to furnish our proxy materials to shareholders over the Internet. Accordingly, a Notice of Internet Availability (NOIA) of Proxy materials will be mailed to some of our shareholders on or about April 8, 2009. These shareholders will have the ability to access the proxy materials on a website referred to in the notice or request a printed set of the proxy materials to be sent to them free of charge, by following the instructions in the notice. For other shareholders, we have elected to mail a full set of printed copies of our proxy materials, as in prior years.

Utilizing Internet delivery for some shareholders will reduce printing and postage costs and – as the theme of this year’s Annual Report conveys – preserve our natural resources. If Internet delivery is well received by shareholders this year, we may consider expanding its use next year.

It is important that your shares are represented and voted at the meeting, regardless of the number you own or whether you attend. We hope that you will plan to attend the annual meeting. If you plan to attend, please call 732-634-1500 Ext. 1281 and leave your name, address and telephone number. Directions to the meeting are printed on the back of the accompanying proxy statement and on the Notice of Internet Availability (NOIA).

We appreciate your continued interest and participation in the affairs of the Company and look forward to seeing you on May 20th.

| Sincerely, |
| --- |
| ● |
| J.
Richard Tompkins Chairman
of the Board |

A Provider of Water, Wastewater and Related Products and Services

| TABLE
OF CONTENTS | |
| --- | --- |
| | Page |
| PROXY STATEMENT | |
| Notice of Meeting | 1 |
| ABOUT THE ANNUAL MEETING | |
| Questions and Answers | 2 |
| GOVERNANCE | 4 |
| Board Matters | 4 |
| Board Committee Assignments | 4 |
| Committees of the Board | 4 |
| Availability of Corporate Governance
Materials | 5 |
| SECURITY OWNERSHIP OF DIRECTORS,
MANAGEMENT | |
| AND CERTAIN BENEFICIAL OWNERS | 6 |
| PROPOSAL 1 – ELECTION OF DIRECTORS | 7 |
| Nominees for Election as Directors with Terms Expiring in 2012
– Class I | 7 |
| Directors Whose Terms Continue Beyond the 2009 Annual Meeting
and Who Are Not Subject to Election This Year | 8 |
| COMPENSATION DISCUSSION AND ANALYSIS | 10 |
| Summary Compensation Table – 2008, 2007 and
2006 | 12 |
| Schedule A, Summary – All Other Compensation – 2008, 2007 and
2006 | 12 |
| Grants of Plan-Based Awards – 2008 | 13 |
| Outstanding Equity Awards – 2008 | 13 |
| Option Exercises & Stock Vested – 2008 | 13 |
| Pension Benefits – 2008 | 14 |
| Director Compensation – 2008 | 14 |
| DIRECTORS’ ANNUAL RETAINER AND MEETING
FEES | 15 |
| CHANGE IN CONTROL AGREEMENTS | 15 |
| COMPENSATION COMMITTEE INTERLOCKS AND | |
| INSIDER PARTICIPATION | 16 |
| COMPENSATION COMMITTEE REPORT | 17 |
| AUDIT COMMITTEE REPORT | 18 |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FEES | 19 |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM | |
| ATTENDANCE AT ANNUAL MEETING | 19 |
| STOCKHOLDER PROPOSALS FOR THE 2010 ANNUAL
MEETING | 20 |
| OTHER MATTERS | 20 |
| MINUTES OF THE 2008 MEETING OF
SHAREHOLDERS | 20 |
| DIRECTIONS TO MIDDLESEX WATER COMPANY | 21 |

Table of Contents

1500 Ronson Road

Iselin, New Jersey 08830-­0452

732-634-1500

www.middlesexwater.com

Notic e o f 200 9 An n ua l Meetin g o f Shareholder s

an d Prox y Statemen t

T o th e Shareholder s o f Middlese x Wate r Company :

NOTICE IS HER E BY GIVEN that the Annual Meeting of Shareholders of MIDDLESEX WATER COMPANY will be held at the office of the Company, 1500 Ronson Road, Iselin, New Jersey on Wednesday, May 20, 2009 at 11:00 a.m. You are cordially invited to attend the meeting and to consider and vote upon the following proposal:

1. Election of three members of Class I of the Board of Directors named in the attached proxy to hold office until the Annual Meeting of Shareholders in the year 2012, and in each case until their respective successors are elected and qualify.

We may also transact any other business as may properly come before the meeting.

The Board of Directors has fixed the close of business on March 16, 2009 as the record date for the determination of shareholders entitled to notice of and to vote at the meeting, and at any adjournments thereof. Shareholders who hold shares in street name may vote through their brokers, banks or other nominees. If proxy cards are received without your choices indicated, the persons designated as proxies will vote your shares in accordance with the recommendations of the Directors and Management.

| Sincerely, By
Order of the Board of Directors, |
| --- |
| ● |
| KENNETH
J. QUINN Vice
President, General Counsel, Secretary
and Treasurer |

YOU R VOT E I S IMPORTANT !

Shareholder s ca n hel p avoi d th e necessit y an d expens e o f follow­u p letter s to ensur e tha t a quoru m i s presen t a t th e Annua l Meetin g b y promptl y votin g thei r shares .

YO U MA Y VOT E YOU R SHARE S I N AN Y O F TH E FOLLOWIN G WAYS :

1. I f yo u receive d a printe d prox y card , mark , sign , dat e an d retur n th e prox y card . I f yo u di d no t receiv e a prox y card , se e instruction s o n th e Notic e o f Interne t Availabilit y (NOIA ) o f Prox y material s o n ho w t o reques t a printe d prox y card ;

2. Cal l th e toll-­fre e telephon e numbe r show n o n you r prox y card ;

3. Visi t th e websit e show n o n you r NOI A o r o n th e prox y car d t o vot e vi a th e Internet ; o r

4. Vot e i n perso n a t th e Annua l Meetin g (i f yo u ar e a beneficia l owne r whos e share s ar e hel d i n th e nam e o f a bank , broke r o r othe r nominee , yo u mus t obtai n a lega l proxy , execute d i n you r favor , fro m th e stockholde r o f recor d (tha t is , you r bank , broke r o r nominee ) t o b e abl e t o vot e a t th e Annua l Meeting .

Pleas e hav e you r NOI A o r prox y car d i n fron t o f yo u whe n votin g b y telephon e o r th e Internet ; i t contain s importan t informatio n tha t i s require d t o acces s th e system .

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ABOUT THE ANNUAL M EETING

Question s an d A nswer s

INFORMATIO N ABOU T VOTIN G

Why have I received these materials? Th e Boar d o f Director s o f Middlese x Wate r Compan y i s solicitin g proxie s fo r us e a t ou r 200 9 Annua l Meetin g o f Shareholder s (“Annua l Meeting” ) t o b e hel d o n Ma y 20 , 200 9 a t th e Company’ s headquarters , 150 0 Ronso n Road , Iselin , Ne w Jerse y a t 11:0 0 a.m . Thi s prox y statement , th e for m o f prox y an d ou r Annua l Repor t fo r th e yea r ende d Decembe r 31 , 200 8 ar e bein g distribute d o r mad e availabl e vi a th e Interne t t o ou r shareholder s o n o r abou t Apri l 8 , 2009 . O n thi s date , al l shareholder s o f recor d an d beneficia l owner s wil l hav e th e abilit y t o acces s al l o f th e prox y material s o n a websit e referre d t o i n th e NOIA . Thes e prox y material s wil l b e availabl e fre e o f charge .

How are other proxy materials being furnished? Unde r ne w rule s adopte d b y th e U.S . Securitie s an d Exchang e Commission , w e hav e chose n t o furnis h ou r prox y materials , includin g thi s Prox y Statemen t an d th e Annua l Repor t t o Shareholders , t o som e o f ou r shareholder s ove r th e Interne t an d t o provid e a Notic e o f Interne t Availabilit y (NOIA ) o f prox y material s b y mail , rathe r tha n mailin g a ful l se t o f th e printe d prox y materials , a s i n prio r years . A s a resul t o f th e Notic e an d Acces s rule , Middlese x Wate r i s abl e t o reduc e th e environmenta l impac t o f producin g an d deliverin g printe d materials .

I f yo u receiv e a NOIA , yo u wil l no t receiv e a printe d cop y o f ou r prox y material s i n th e mai l unles s yo u reques t the m b y followin g th e instruction s provide d i n th e NOIA . Instead , th e NOI A instruct s yo u ho w t o acces s an d revie w al l o f th e importan t informatio n containe d i n th e Prox y Statemen t an d Annua l Report . Th e NOI A als o explain s ho w yo u ma y submi t you r prox y ove r th e Internet . I f yo u woul d lik e t o receiv e a printe d cop y o f ou r prox y materials , yo u shoul d follo w th e instruction s i n th e NOIA .

Who can vote? Shareholder s o f recor d a t th e clos e o f busines s o n Marc h 16 , 2009 , whic h w e refe r t o a s th e recor d date , ar e entitle d t o notic e o r an d t o vot e a t th e meeting . A s o f suc h date , ther e wer e 13,419,61 9 share s o f Middlese x Wate r commo n stoc k outstanding , eac h entitle d t o on e vote . A complet e lis t o f th e shareholder s entitle d t o vot e a t th e meetin g wil l b e availabl e fo r examinatio n b y an y shareholde r o f record a t ou r office s a t 150 0 Ronso n Road , Iselin , N J 0883 0 fo r a perio d o f 1 0 day s prio r t o th e Annua l Meeting . Th e lis t wil l als o b e availabl e fo r examinatio n b y an y shareholde r o f recor d a t th e Annua l Meeting .

How do I Vote: Yo u ma y vot e i n an y o f th e followin g ways :

· I f yo u receive d a printe d prox y card , mark , sign , dat e an d retur n th e prox y card . I f yo u di d no t receiv e a prox y card , se e instruction s o n th e Notic e o f Interne t Availabilit y (NOIA ) o f Prox y material s o n ho w t o reques t a printe d prox y card ;

· Cal l th e toll-fre e telephon e numbe r show n o n you r prox y card ;

· Visi t th e websit e show n o n you r NOI A o r o n th e prox y car d t o vot e vi a th e Internet ; o r

· Vot e i n perso n a t th e Annua l Meetin g (i f yo u ar e a beneficia l owne r whos e share s ar e hel d i n th e nam e o f a bank , broke r o r othe r nominee , yo u mus t obtai n a lega l proxy , execute d i n you r favor , fro m th e stockholde r o f recor d (tha t is , you r bank , broke r o r nominee ) t o b e abl e t o vot e a t th e Annua l Meeting .

Pleas e hav e you r NOI A o r prox y car d i n fron t o f yo u whe n votin g b y telephon e o r th e Internet ; i t contain s importan t informatio n tha t i s require d t o acces s th e system .

How are Proxies Used? Al l share s tha t hav e bee n properl y vote d – whethe r b y Internet , telephon e o r mail , an d no t revoke d wil l b e vote d a t th e Annua l Meetin g i n accordanc e wit h you r instructions . I f yo u sig n you r prox y car d bu t d o no t giv e votin g instructions , th e share s represente d b y tha t prox y wil l b e vote d a s recommende d b y th e Board . Th e Boar d recommend s a vot e fo r th e electio n o f thre e directo r nominee s name d i n thi s Prox y Statement . I f an y othe r matter s ar e properl y presente d a t th e Annua l Meetin g fo r consideratio n an d i f yo u hav e vote d you r share s b y Internet , telephon e o r mail , th e person s name d a s proxie s i n th e prox y car d wil l hav e th e discretio n t o vot e o n thos e matter s fo r you . A t th e dat e w e file d thi s Prox y Statemen t wit h th e SEC , w e d o no t kno w o f an y othe r matter s t o b e raise d a t th e Annua l Meeting .

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What am I voting on? Yo u ar e votin g o n on e proposal . 1 ) Electio n o f thre e member s o f Clas s I o f th e Boar d o f Director s t o hol d offic e unti l th e Annua l Meetin g o f Shareholder s i n th e yea r 2012 , an d i n eac h case , unti l thei r respectiv e successor s ar e electe d an d qualify .

What are the voting recommendations of the Board? Th e Board’ s recommendatio n fo r th e proposa l i s se t fort h i n thi s prox y statemen t togethe r wit h th e descriptio n o f th e proposal . I n summary , th e Boar d recommend s a vote : FO R Proposa l 1 t o elec t thre e Clas s I directors .

What are the votes required for approval? Director s ar e electe d (Proposa l 1 ) b y a pluralit y vot e o f th e holder s o f share s o f Commo n Stoc k presen t i n perso n o r represente d b y prox y a t th e Annua l Meetin g an d entitle d t o vot e o n th e electio n o f directors . Abstention s an d broke r non­vote s wil l no t b e include d i n determinin g th e numbe r o f vote s cas t concernin g an y matter .

Can I change my vote after I have returned my proxy card? Yes . Th e givin g o f a prox y doe s no t preclud e th e righ t t o vot e i n perso n shoul d th e shareholde r givin g th e prox y s o desire , an d a prox y ma y b e revoke d b y givin g notic e t o th e Secretar y o f th e Compan y i n writin g a t an y tim e prio r t o th e commencemen t o f th e meetin g o r i n ope n meetin g prio r t o th e takin g o f th e vot e t o whic h suc h revocatio n relates .

Who will count the vote? Vote s wil l b e counte d b y representative s o f Broadridg e Financia l Solutions , Inc . wh o wil l tall y th e vote s an d certif y th e results . It s representative s wil l serv e a s inspector s o f th e election .

Who can attend the Annual Meeting? Al l shareholder s o f recor d a s o f th e clos e o f busines s o n Marc h 16 , 200 9 ca n atten d th e meeting . Seating , however , i s limited . Attendanc e a t th e Annua l Meetin g wil l b e o n a firs t arriva l basis .

Will there be a management presentation at the Annual Meeting? Yes . Managemen t wil l giv e a brie f presentatio n durin g th e meeting .

Can I bring a guest? Whil e bringin g a gues t i s no t prohibited , pleas e b e awar e tha t seatin g availabilit y a t th e Annua l Meetin g ma y b e limited .

When are shareholder proposals due for the 2010 Annual Meeting? Shoul d a shareholde r inten d t o presen t a proposa l a t th e annua l meetin g t o b e hel d in th e yea r 2010 , yo u mus t submi t you r proposa l t o th e Secretar y o f th e Compan y a t 150 0 Ronso n Road , P.O . Bo x 1500 , Iselin , Ne w Jerse y 08830­-0452 , no t late r tha n Decembe r 11 , 2009 , i n orde r t o b e considere d fo r inclusio n i n th e Company’ s prox y statemen t an d for m o f prox y relatin g t o th e 201 0 Annua l Meeting .

How will I learn the result of the vote? Announcemen t o f th e preliminar y votin g result s wil l occu r a t th e Annua l Meetin g o f Shareholder s an d a pres s releas e wil l b e issued .

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GOVERN A NCE

Boar d M a tter s

Managemen t o f th e Compan y i s unde r th e genera l directio n o f th e Boar d o f Director s wh o ar e electe d b y th e shareholders . Th e Boar d o f Director s hold s regula r monthl y meeting s an d meet s o n othe r occasion s whe n require d i n specia l circumstances . Th e Boar d o f Director s hel d twelv e meeting s an d th e Boar d Committee s hel d twenty­tw o meeting s durin g th e yea r 2008 . Eac h incumben t Directo r attende d 95 % o r mor e o f th e tota l numbe r o f meeting s o f th e Boar d an d Committee s o n whic h eac h served .

Th e tabl e belo w provide s committe e assignment s fo r eac h o f th e Boar d Committee s durin g 2008 :

Boar d Co m mitte e Assignment s

| NAME | AUDIT | CAPITAL — IMPROVEMENT | COMPENSATION | CORPORAT E GOVERNANC E — AND
NOMINATING | PENSION | AD
HOC — PRICING |
| --- | --- | --- | --- | --- | --- | --- |
| Annette
Catino | X | | X | X | | X |
| Joh n C . Cuttin g | X | X | | | X | X |
| Joh n R . Middleton , M.D . | X | | X | X | | |
| Joh n P . Mulkeri n | X+ | | | X | X | |
| Walte r G . Reinhar d | | X | | X | X | |
| Jeffrie s Shei n | | | X | X | X | X |
| J . Richar d Tompkin s | | X | | | | X |

• Indicates Committee Chair

• Indicate s Audi t Committe e Financia l Exper t

Committees of the Board

Audi t Committe e

Th e Audi t Committe e review s wit h th e independen t registere d publi c accountin g fir m th e scop e o f th e annua l audit ; receive s an d review s th e independen t registere d publi c accountin g firm’ s annua l report ; review s th e independenc e o f th e independen t registere d publi c accountin g firm , service s provide d b y the m an d thei r fees ; recommend s t o th e Boar d o f Director s th e inclusio n o f th e audite d financia l statement s i n th e Company’ s Annua l Repor t t o th e Securitie s an d Exchang e Commissio n o n For m 10­K ; an d i s directl y responsibl e fo r th e appointmen t o f a n independen t registere d publi c accountin g fir m fo r th e followin g calenda r year . I n Marc h 2009 , th e Boar d o f Director s re­approve d th e writte n Charte r fo r th e Audi t Committee . Th e Committe e hel d fou r meeting s an d tw o teleconferenc e meeting s durin g 2008 . Al l o f th e member s o f th e Audi t Committe e hav e bee n determine d b y th e Boar d t o b e independen t director s a s define d i n th e listin g standard s o f NASDAQ .

Capita l Improvemen t Committe e

Th e Capita l Improvemen t Committe e review s an d approve s th e Capita l Budge t an d th e long­ter m capita l plannin g needs . Th e Committe e als o monitor s capita l project s an d expenditure s durin g th e year . I n Decembe r 2008 , th e Boar d o f Director s re­approve d a writte n Charte r fo r th e Capita l Improvemen t Committee . Th e Committe e hel d thre e meeting s durin g 2008 .

Compensatio n Committe e

Th e Compensatio n Committe e review s an d make s recommendation s t o th e Boar d o f Director s a s t o th e salaries , benefit s an d incentiv e compensatio n o f th e Executiv e Officer s o f th e Company . Executiv e Office r incentiv e compensatio n i s awarde d unde r th e Restricte d Stoc k Plan . (Pleas e refe r t o pag e 1 1 fo r a descriptio n o f th e Restricte d Stoc k Plan. ) I n Februar y 2009 ,

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th e Boar d o f Director s re­approve d a writte n Charte r fo r th e Compensatio n Committee . Th e Committe e hel d fou r meeting s durin g 2008 . Al l o f th e member s o f th e Compensatio n Committe e hav e bee n determine d b y th e Boar d t o b e independen t director s a s define d i n th e listin g standard s o f NASDAQ .

Corporat e Governanc e an d Nominatin g Committe e

I n Februar y 2008 , th e Boar d o f Director s vote d t o merg e tw o formerl y separat e committee s – th e Corporat e Governanc e Committe e an d th e Nominatin g Committe e int o on e committe e know n a s th e Corporat e Governanc e an d Nominatin g Committee . Thi s newl y merge d committe e review s an d make s recommendation s relatin g t o th e governanc e o f th e Company , th e performanc e an d compositio n o f th e Boar d an d Boar d committees , successio n plannin g an d significan t organizatio n changes . Th e Committe e make s recommendation s t o th e Boar d o f Director s wit h respec t t o nomination s fo r th e Boar d an d screen s candidate s considere d fo r electio n t o th e Board . I n thi s capacity , th e Committe e concern s itsel f wit h th e compositio n o f th e Boar d wit h respec t t o dept h o f experience , balanc e o f professiona l interests , require d expertis e an d othe r factor s an d evaluate s prospectiv e nominee s identifie d b y th e Corporat e Governanc e an d Nominatin g Committe e o r referre d b y othe r Boar d members , management , shareholder s o r externa l sources . Al l o f th e member s o f th e Corporat e Governanc e an d Nominatin g Committe e hav e bee n determine d b y th e Boar d t o b e independen t director s a s define d i n th e listin g standard s o f NASDAQ .

Th e Corporat e Governanc e an d Nominatin g Committe e wil l conside r shareholders ’ recommendation s fo r nominee s fo r electio n t o th e Boar d o f Directors . Recommendation s shoul d b e sen t t o Middlese x Wate r Company , Offic e o f th e Secretary , 150 0 Ronso n Road , P.O . Bo x 1500 , Iselin , Ne w Jerse y 08830­-0452 ; o r sen t vi a th e interne t t o th e followin g e­mai l address : kquinn@middlesexwater.com . Nomination s mus t b e accompanie d b y th e writte n consen t o f an y suc h perso n t o serv e i f nominate d an d electe d an d b y biographica l materia l t o permi t evaluatio n o f th e individua l recommended , includin g appropriat e references . Th e Committe e shal l mak e inquir y o f al l reference s an d an y othe r area s deeme d appropriat e i n fulfillin g it s obligations . Th e Secretar y o f th e Company shoul d receiv e an y nomination s fo r Directo r b y th e clos e o f busines s o n Decembe r 11, 2009 , i n orde r t o b e considere d fo r inclusio n i n th e Company’ s prox y statemen t an d for m o f prox y relatin g t o th e 201 0 Annua l Meetin g o f Shareholders .

I n Septembe r 2008 , th e Boar d o f Director s approve d a writte n Charte r fo r th e newl y designate d Corporat e Governanc e an d Nominatin g Committee . Th e Committe e hel d fiv e meeting s durin g 2008.

Pensio n Committe e

Th e Pensio n Committe e review s investmen t policie s an d determine s recommende d investmen t objective s fo r th e Company’ s Pensio n an d Retire e Welfar e Plans . Th e Committe e als o review s th e performanc e o f th e Company’ s 401(k ) Pla n Administrato r an d review s option s offere d i n th e Company’ s 401(k ) plan . Th e Committe e meet s quarterl y wit h th e Company’ s outsid e Investmen t Managers . I n Januar y 2009 , th e Boar d o f Director s re­approve d a writte n Charte r fo r th e Pensio n Committee . Th e Committe e hel d fou r meeting s durin g 2008 .

A d Ho c Pricin g Committe e

Th e a d ho c Pricin g Committe e meets , a s needed , t o revie w financia l matter s including , bu t no t limite d to , th e pricin g an d issuanc e o f commo n stoc k an d corporat e bonds . Th e Committe e di d no t mee t i n 2008 .

Availabilit y o f Corporat e Governanc e Mat e rial s

Th e Boar d o f Director s ha s adopte d a Cod e o f Conduc t tha t applie s t o al l o f ou r Directors , Officer s an d employees . Th e Company’ s Cod e o f Conduc t a s wel l a s th e charter s fo r th e Audit , Capita l Improvement , Compensation , Corporat e Governanc e an d Nominating , an d Pensio n Committee s ar e availabl e o n ou r websit e www.middlesexwater.co m unde r th e headin g Investo r Relation s – (Corporat e Governance) . Th e foregoin g informatio n i s availabl e i n prin t t o an y shareholde r wh o request s it . Request s shoul d b e addresse d t o Kennet h J . Quinn , Vic e President , Genera l Counsel , Secretar y an d Treasurer , Middlese x Wate r Company , 150 0 Ronso n Road , P.O . Bo x 1500 , Iselin , Ne w Jerse y 08830-0452 .

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SECURIT Y OWNERSHI P O F DIRECT O RS , MANAGEMEN T AN D

CERTAI N BENEFICIA L OWNER S

Th e followin g tabl e set s forth , a s o f Marc h 16 , 2009 , beneficia l ownershi p o f Middlese x Wate r Compan y Commo n Stoc k b y th e electe d Directors , Executiv e Officer s name d i n th e tabl e appearin g unde r Executiv e Compensation , an d al l electe d Director s an d Executiv e Officer s a s a group . Jeffrie s Shei n owne d 2.12 % o f th e share s outstandin g o n Marc h 16 , 2009 . Al l othe r individua l electe d Director s an d Executiv e Officer s owne d les s tha n 1 % o f th e shares outstandin g o n Marc h 16 , 2009 .

| | Amount
and Nature of
Beneficial Ownership (1) |
| --- | --- |
| Name | |
| Directors | |
| Annette
Catino | 8,559 |
| Joh n C . Cuttin g | 36,611 |
| Joh n R . Middleton , M.D . | 6,932 |
| Joh n P . Mulkeri n | 25,000 |
| Walte r G . Reinhar d | 2,565 |
| Jeffrie s Shei n | 284,665 |
| J.
Richard Tompkins | 40,672 |
| Name d Executiv e Officer s | |
| Denni s W . Dol l | 19,017 |
| A . Bruc e O’Conno r | 32,499 |
| Kennet h J . Quin n | 5,204 |
| Richard
M. Risoldi | 12,793 |
| Ronal d F . William s | 20,985 |
| Al l electe d Director s an d Executiv e Officer s a s
a | |
| grou p includin g thos e name d above . | 514,363* |
| * 3.83 % o f th e share s outstandin g o n Marc h 16 , 2009 . | |
| (1 ) Beneficia l owne r ha s th e sol e powe r t o vot e an d dispos e o f suc h shares . | |

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PROPOSA L 1 - E LECTIO N O F DIRECTOR S

Th e Corporat e Governanc e an d Nominatin g Committe e ha s recommende d t o th e Boar d th e followin g candidate s fo r electio n a t th e Annua l Meetin g o f Shareholders : Joh n C . Cutting , Joh n P . Mulkeri n an d Denni s W . Doll . Thes e candidate s ar e t o b e electe d eac h t o hol d offic e unti l th e Annua l Meetin g o f Shareholder s i n th e yea r 2012 , an d unti l thei r respectiv e successor s ar e electe d an d qualify . Th e presen t term s o f Clas s I director s expir e a t th e yea r 200 9 Annua l Meeting .

Proxie s i n th e accompanyin g for m wil l b e vote d fo r thes e nominees , unles s authorit y t o vot e fo r on e o r mor e o f the m shal l hav e bee n withhel d b y s o markin g th e enclose d proxy . Director s shal l b e electe d b y a pluralit y o f th e vote s cas t a t th e election . I f a t th e tim e o f th e meetin g an y o f th e n ominee s liste d shoul d b e unabl e t o serve , whic h i s no t anticipated , i t i s th e intenti o n o f th e person s designate d a s proxie s t o vote , i n thei r discretion , fo r othe r nomin ees , unles s th e numbe r o f Director s constitutin g a ful l Boar d i s reduced .

Ther e i s show n a s t o eac h nominee , an d a s t o eac h Directo r whos e ter m o f offic e wil l continu e afte r th e yea r 200 9 Annua l Meeting , ag e a s o f th e dat e o f th e Annua l Meeting , Class , th e perio d o f servic e a s a Directo r o f th e Company , an d busines s experienc e durin g th e las t fiv e years .

RECOMMENDATION

Th e Boar d o f Director s unanimousl y recommend s tha t stockholder s vot e FO R Proposa l 1, th e electio n o f Joh n C . Cutting , Joh n P . Mulkeri n an d Denni s W . Doll .

NOMINEE S FO R ELE C TIO N A S

DIRECTOR S WIT H TERM S EXPIRIN G I N 201 2 – CLAS S I

●	JOH N C . CUTTING , ag e 72 , becam e a directo r o f th e Compan y i n 1997 . Prio r t o hi s retiremen t h e serve d a s Senio r Engineer , Scienc e Application s Internationa l Corporation , specialist s i n information , energ y an d militar y systems , Pittsburgh , Pennsylvania . H e i s Chairma n o f th e Pensio n Committe e an d Capita l Improvemen t Committe e an d a Membe r o f th e Audi t Committe e an d a d ho c Pricin g Committee . Mr . Cuttin g serve s a s a Directo r o f Tidewate r Utilities , Inc . (TUI) , Tidewate r Environmenta l Services , Inc . an d Whit e Mars h Environmenta l Systems , Inc . (1 )
●	JOH N P . MULKERIN , ag e 71 , becam e a directo r o f th e Compan y i n 1997 . Prio r t o hi s retirement , h e serve d a s Presiden t an d Chie f Executiv e Office r o f Firs t Sentine l Bancorp , Inc. , Holdin g Compan y fo r Firs t Saving s Bank , Pert h Amboy , Ne w Jerse y an d wa s a membe r o f th e Board s o f Director s o f sai d Companies . Firs t Sentine l Bancorp , Inc . wa s acquire d b y Providen t Financia l Services , Inc. , th e Holdin g Compan y fo r Th e Providen t Bank . Mr . Mulkeri n currentl y serve s o n th e Board s o f Director s o f bot h o f thos e Companies . Mr . Mulkeri n i s a Directo r o f Rarita n Ba y Medica l Center , Dayto p Villag e Foundatio n an d Middlese x Count y College . H e i s Chairma n o f th e Audi t Committe e an d th e Audi t Committe e Financia l Expert ; an d a Membe r o f th e Corporat e Governanc e an d Nominatin g Committe e an d th e Pensio n Committee . (1 )
●	DENNI S W . DOLL , ag e 50 , wa s name d Presiden t an d Chie f Executiv e Office r an d becam e a Directo r o f Middlese x effectiv e Januar y 1 , 2006 . Mr . Dol l joine d th e Compan y i n Novembe r 200 4 a s Executiv e Vic e President . Prio r t o joinin g th e Company , Mr . Dol l wa s employe d b y Elizabethtow n Wate r Compan y sinc e 1985 , servin g mos t recentl y a s a membe r o f th e senio r leadershi p tea m o f th e Northeas t Regio n o f America n Water , whic h wa s comprise d o f Elizabethtow n Wate r Company , Ne w Jersey-America n Wate r Compan y an d Lon g Islan d Wate r Corporatio n an d include d othe r regulate d an d non-regulate d subsidiaries . Mr . Dol l serve s a s Directo r an d Chairma n o f Tidewate r Utilities , Inc . (TUI) , Tidewate r Environmenta l Services , Inc. ; Whit e Mars h Environmenta l Systems , Inc. , a subsidiar y o f TUI ; Pineland s Wate r Compan y an d Pineland s Wastewate r Company ; Utilit y Servic e Affiliates , Inc. , an d Utilit y Servic e Affiliate s (Pert h Amboy ) Inc . sinc e Januar y 1 , 2006 .

(1) Thi s directo r ha s bee n determine d b y th e Boar d o f Director s t o b e independen t unde r th e applicabl e listin g standard s o f NASDAQ .

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DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2 009 ANNUAL MEETING AND

WHO ARE NOT SUBJECT TO ELECTION THIS YEAR

Clas s I I – Director s Whos e Term s Expir e i n 201 0

●

ANNETT E CATINO , ag e 52 , becam e a directo r o f th e Compan y i n 2003 . Sh e i s Presiden t an d CE O o f QualCar e Allianc e Networks , Inc. , Piscataway , Ne w Jersey , a manage d car e organization , sinc e 1991 , o f whic h sh e serve s a s a Director . Ms . Catin o i s a Directo r o f Caucu s N J Educationa l Corporation , Northfiel d Ban k Corp. , Th e Va l Skinne r Foundatio n an d th e America n Associatio n o f Preferre d Provider s Organization . Ms . Catin o i s Chairwoma n o f th e a d ho c Pricin g Committe e an d a Membe r o f th e Audi t Committee , th e Compensatio n Committe e an d th e Corporat e Governanc e an d Nominatin g Committee . (1 )

●

WALTE R G . REINHARD , ESQ. , ag e 63 , becam e a directo r o f th e Compan y i n 2002 . H e i s a Partne r o f th e la w fir m o f Norris , McLaughli n & Marcus , P.A . o f Bridgewater , Ne w Jersey , sinc e 1984 . Mr . Reinhar d serve s a s a Directo r o f th e Fanwood-Scotc h Plain s YMCA . Mr . Reinhar d i s Chairma n o f th e Corporat e Governanc e an d Nominatin g Committe e an d a Membe r o f th e Capita l Improvemen t Committe e an d th e Pensio n Committee . (1) , (2) .

(1) Thi s directo r ha s bee n determine d b y th e Boar d o f Director s t o b e independen t unde r th e applicabl e listin g standard s o f NASDAQ .

(2) Norris , McLaughli n & Marcus , P.A. , provide s lega l service s t o th e Compan y i n th e area s o f corporat e an d regulator y matters .

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DIRECTOR S WHOS E TERM S CONTINU E BEYON D TH E 200 9 ANNUA L MEETIN G AN D

WHO ARE NOT SUBJECT TO ELECTION THIS YEAR

Clas s II I – Director s Whos e Term s Expir e i n 201 1

●	JOH N R . MIDDLETON , M.D. , ag e 64 , becam e a directo r o f th e Compan y i n 1999 . H e i s th e forme r Chai r o f th e Departmen t o f Medicin e an d forme r Chie f Medica l Office r o f Rarita n Ba y Medica l Cente r an d i s currentl y engage d i n th e privat e practic e o f Infectiou s Diseases . H e i s a Fello w o f th e America n Colleg e o f Physician s an d a Fello w o f th e Infectiou s Disease s Societ y o f America . Dr . Middleto n i s a Membe r o f th e Audi t Committee , th e Compensatio n Committe e an d th e Corporat e Governanc e an d Nominatin g Committee . (1 )
●	JEFFRIE S SHEIN , ag e 69 , becam e a directo r o f th e Compan y i n 1990 . H e i s a Managin g Partne r o f JG T Managemen t Co. , LLC , a managemen t an d investmen t firm , sinc e 200 3 an d formerl y a Partne r o f Jacobson , Goldfar b & Tanzma n Associates , Woodbridge , Ne w Jersey , a commercia l rea l estat e brokerag e firm , sinc e 1972 . H e i s a Directo r o f Rarita n Ba y Medica l Cente r an d a Directo r o f Th e Providen t Bank . Mr . Shei n i s Chairma n o f th e Compensatio n Committe e an d a Membe r o f th e Corporat e Governanc e an d Nominatin g Committee , Pensio n Committe e an d th e a d ho c Pricin g Committee . (1 )
●	J.
RICHAR D TOMPKINS , ag e 70 , becam e a directo r o f th e Compan y i n 1981 . H e ha s serve d a s Chairma n o f th e Boar d o f th e Compan y sinc e Ma y 199 0 an d wa s Presiden t fro m Ma y 1981­2003 . Mr . Tompkin s i s a pas t Presiden t o f th e Nationa l Associatio n o f Wate r Companie s an d th e Ne w Jerse y Utilitie s Association . H e i s pas t Directo r an d Chairma n o f Tidewate r Utilities , Inc . (TUI) , Whit e Mars h Environmenta l Systems , Inc. , ( a subsidiar y o f TUI) , Pineland s Wate r Company , Pineland s Wastewate r Company , Utilit y Servic e Affiliates , Inc. , Utilit y Servic e Affiliate s (Pert h Amboy ) Inc. , an d Bayvie w Wate r Company . H e currentl y serve s a s a membe r o f th e Capita l Improvemen t Committe e an d th e a d ho c Pricin g Committee .

(1) Thi s directo r ha s bee n determine d b y th e Boar d o f Director s t o b e independen t unde r th e applicabl e listin g standard s o f NASDAQ .

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COMPENSATIO N DISCUSS I O N & ANALYSI S

Th e Compensatio n Discussio n & Analysi s (CD&A ) describe s th e Company’ s compensatio n objectives , policie s an d basi s fo r determinatio n o f Compensatio n fo r th e Name d Executiv e Officer s an d th e othe r executiv e officer s o f th e Compan y (hereinafter , collectivel y referre d t o a s th e “Executiv e Officers”) .

Th e Company’ s compensatio n objective s an d policie s applicabl e t o th e Executiv e Officer s see k t o incen t th e advancemen t o f thre e corporat e prioritie s whic h ar e desirabl e an d necessar y fo r th e Compan y t o achiev e it s expresse d visio n an d strateg y i n th e creatio n o f long-ter m shareholde r value . Thos e corporat e prioritie s ar e (1 ) profitabl e growth ; (2 ) operationa l excellence ; an d (3) developin g th e technica l an d managemen t skill s o f th e Compan y employees . Th e Company’ s compensatio n an d benefit s program s ar e designe d t o (a ) attrac t an d retai n qualifie d executives ; (b ) suppor t shor t an d long­ter m goal s an d objective s o f th e Compan y and ; (c ) appropriatel y rewar d individual s fo r thei r contributio n t o th e Company’ s success . Thes e program s ar e directl y relate d t o th e creatio n o f valu e fo r shareholder s throug h progres s i n th e thre e corporat e prioritie s liste d above .

I n orde r t o achiev e progres s i n th e thre e prioritie s above , th e Company , throug h th e Executiv e Officers , set s goal s eac h yea r fo r incentiv e compensatio n purpose s whic h ar e consisten t wit h thos e priorities . Eac h goa l i s designe d t o b e specific , measurable , achievabl e wit h effort , relevan t an d time­bound .

Consisten t wit h th e Company’ s corporat e priorities , expectation s ar e establishe d fo r th e Executive Officer s i n th e followin g thre e areas :

A. Financia l – Executiv e Officer s ar e expecte d t o delive r appropriat e shareholde r return s t o ensur e competitiv e performanc e i n relatio n t o th e Company’ s pee r grou p o f publicly­trade d companies .

B. Operationa l – Executiv e Officer s continu e t o diligentl y implemen t an d manag e th e Company’ s policies , procedures , processe s an d program s fo r complianc e wit h regulator y requirement s an d wit h regar d t o prudent , cost-effectiv e managemen t practices . Th e Executiv e Officer s ar e expecte d t o attrac t an d retai n qualifie d employee s an d kee p appropriat e focu s o n trainin g an d development . Th e Executiv e Officer s full y develop , implemen t an d manag e successio n plans . The y ar e expecte d t o maintai n open , hones t an d frequen t communication s wit h employee s a t al l level s regardin g thei r professiona l development , caree r paths , performanc e an d othe r area s o f opportunit y fo r bot h themselve s an d fo r th e Company . Th e Executiv e Officer s develo p an d execut e plan s t o gro w th e business , i n term s o f bot h customer s an d profits . Th e Company , throug h it s Executiv e Officers , continue s t o manag e t o hig h standard s fo r wate r quality , servic e delivery , asse t managemen t an d othe r disciplines . A t th e sam e time , th e Executiv e Officer s see k t o contro l operatin g cost s t o th e exten t possible , t o maximiz e shareh olde r return s an d t o maintai n reasonabl e custome r rates .

C. Leadershi p – Executiv e Officer s ar e expecte d t o instil l a Compan y cultur e base d o n ethica l behavior , mutua l respect , ope n an d hones t communication s an d a commitmen t t o learnin g an d continue d improvemen t an d accountabilit y fo r performance . B y settin g a n exampl e throug h th e “ton e a t th e top ” thes e value s an d behavior s ar e diligentl y instille d throughou t th e Company .

ELEMENTS OF COMPENSATION

Th e element s o f compensatio n relevan t t o th e Executiv e Officer s consis t o f bas e salary , eligibilit y fo r incentiv e compensatio n throug h participatio n i n th e Company’ s Restricte d Stoc k Pla n an d participatio n i n a Supplementa l Executiv e Retiremen t Pla n (SERP) . I n addition , th e Executiv e Officer s participat e unde r th e sam e term s an d condition s i n retirement , healt h an d welfar e plan s tha t ar e generall y availabl e t o al l eligibl e employees . Al l element s o f compensatio n ar e furthe r detaile d i n th e table s containe d herein .

Bas e salar y level s ar e reviewe d a t leas t annuall y an d ar e benchmarke d agains t othe r companies , bot h utilitie s an d non­utilities , a t th e Stat e an d nationa l levels . Independen t salar y studie s ar e periodicall y conducte d wit h th e assistanc e o f a n outsid e consultan t retaine d b y th e Compensatio n Committee . Salarie s fo r satisfactor y performanc e ar e targete d a t th e media n o f th e competitiv e market . Individua l performanc e o f the executiv e i s give n appropriat e consideratio n whe n settin g salarie s agains t th e competitiv e marke t data .

The factors and criteria upon which the Chief Executive Officer’s (CEO) compensation is based generally include those discussed with respect to the other Executive Officers. In addition, the Compensation Committee examines the effectiveness with which the CEO is managing the performance of the executive team. Among the criteria to be used for evaluation are the following: (a ) Financia l – to review the establishment and achievement of appropriate short and long-term financial objectives. (b) Operationa l – to determine that appropriate policies, procedures, processes and programs have been established and implemented so the Company is compliant under relevant regulatory policies; to ensure the development of effective recruitment, training, retention and personnel communications plans; to ensure the Company is developing and executing initiatives on both a timely and cost-effective basis; to promote efficiency and continuous improvement so results are tied to the strategic

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plan and budget that are focused on increased shareholder value, the quality of service delivery and employee satisfaction; and (c ) Leadershi p – to ensure the CEO is appropriately leading the Company and setting and executing strategies. The Compensation Committee reviews the CEO’s performance in light of the corporate priorities mentioned above to determine how effectively the CEO is contributing to the delivery of the Company’s strategy and how effectively the CEO is aligning the organization to execute the strategies in order to achieve the desired results.

Th e Executiv e Officer s ar e eligibl e t o participat e i n a Supplementa l Executiv e Retiremen t Pla n (SERP ) a t th e discretio n o f th e Boar d o f Directors . A participant , wh o retire s o n thei r norma l retiremen t date , a s define d i n th e SERP , i s entitle d t o a n annua l retiremen t benefi t o f u p t o 75 % o f compensation , reduce d b y th e primar y socia l securit y benefit , an d furthe r reduce d b y an y benefi t payabl e fro m th e Company’ s qualifie d define d benefi t pensio n plan . Furthe r reduction s ar e mad e fo r certai n retiremen t benefit s fro m prio r employmen t wher e suc h benefit s hav e accrued . Generally , a participan t i s veste d a t te n (10 ) year s o f servic e i n th e cas e o f retirement , an d i n th e even t o f a Chang e i n Control , a s describe d furthe r herein . A participant’ s righ t t o receiv e benefit s unde r th e SER P generall y commence s upo n retiremen t o r death , an d i n connectio n wit h a Chang e i n Control , upo n terminatio n unde r th e circumstance s describe d i n th e SERP .

Annua l benefit s ar e generall y payable , upo n achievin g norma l retirement , fo r fiftee n (15 ) year s eithe r t o th e participan t o r th e participant’ s beneficiary . Retiremen t benefit s ma y als o b e i n th e for m o f a singl e lif e annuity , join t an d 50 % survivor’ s annuity , join t an d 100 % survivor’ s annuity , singl e lif e annuit y wit h a te n (10 ) yea r certai n perio d o r singl e lif e annuit y wit h a fiftee n (15 ) yea r certai n perio d pai d o n a n actuaria l equivalen t basis .

Th e Compan y i s no t obligate d t o se t asid e o r earmar k an y monie s o r othe r asset s specificall y fo r th e purpos e o f fundin g th e SERP , excep t tha t upo n a Chang e i n Control , th e Compan y woul d b e obligate d t o mak e contribution s t o a trus t anticipate d t o b e sufficien t t o mee t th e obligation s unde r th e SERP . Absen t a Chang e i n Control , benefit s ar e i n th e for m o f a n unfunde d genera l obligatio n o f th e Company .

Fo r th e yea r 2008 , th e Compan y pai d lif e insuranc e premium s fo r th e Executiv e Officer s whic h provide s a pre­retiremen t ne t deat h benefi t o f 3 time s bas e salar y a t dat e o f death .

Th e Compan y ha s Chang e i n Contro l Terminatio n Agreement s wit h th e Executiv e Officer s an d thes e Chang e i n Contro l Agreement s ar e discusse d hereinafter .

Th e Compan y maintain s a n incentiv e compensatio n progra m i n th e for m o f a Restricte d Stoc k Pla n fo r th e purpos e o f attractin g an d retainin g ke y executive s an d othe r employee s havin g manageria l responsibilit y wh o hav e contributed , o r ar e likel y t o contribute , significantl y t o th e shor t an d long­ter m performanc e o f th e Company . Award s unde r th e Restricte d Stoc k Pla n ar e designe d t o enhanc e financia l performance , qualit y servic e deliver y an d corporat e efficienc y throug h a performance­base d restricte d stoc k award . Award s t o th e Executiv e Officers , othe r tha n th e CEO , ar e recommende d b y th e CE O an d reviewe d an d approve d b y th e Compensatio n Committee . Th e CEO’ s recommendations , an d th e Committee’ s ultimat e approval , ar e base d upo n a n assessmen t o f th e achievemen t o f variou s financia l an d non­financia l objectives . Th e criteri a use d i n suc h assessmen t ar e selecte d an d approve d b y th e Committee . Afte r ful l revie w b y th e Compensatio n Committee , a repor t an d recommendatio n i s mad e t o th e ful l Boar d o f Director s fo r fina l approva l o f th e propose d restricte d stoc k awards . Wit h respec t t o th e CEO , th e Compensatio n Committe e make s it s ow n evaluatio n an d recommendatio n a s t o th e amoun t o f awar d t o th e CE O unde r th e Restricte d Stoc k Plan . I n determinin g th e amoun t o f th e awar d fo r th e CEO , th e Compensatio n Committe e wil l conside r th e correlatio n betwee n th e achievemen t o f th e Company’ s goal s an d th e incentiv e compensatio n awards . Th e committe e wil l ensur e th e CEO’ s achievemen t o f incentiv e compensatio n goal s i s consisten t wit h overal l performance , tha t is , i t wil l see k t o ensur e critica l cor e function s ar e no t inappropriatel y compromise d fo r th e direc t purpos e o f obtainin g incentiv e compensatio n awards . I n addition , th e Compensatio n Committe e wil l see k t o determin e tha t al l critica l operationa l need s hav e bee n me t befor e an y consideratio n ca n b e give n t o incentiv e compensatio n awards , regardles s o f an y positiv e overal l financia l performance . Thes e critica l function s includ e regulator y compliance , wate r quality , employe e safety , reliabilit y o f assets , maintainin g a well­traine d an d motivate d wor k forc e an d othe r importan t aspect s o f operation s an d administration . Al l o f thes e factor s ar e incorporate d int o th e determinatio n o f th e Compensatio n Committe e i n term s o f th e amoun t o f a n awar d t o th e CE O unde r th e Restricte d Stoc k Plan .

Al l award s o f restricte d stoc k t o th e Executiv e Officer s ar e mad e i n accordanc e wit h th e provision s o f th e Restricte d Stoc k Plan . Unde r suc h Plan , generall y non e o f th e award s o f restricte d stoc k ves t unti l fiv e (5 ) year s fro m th e dat e o f grant . However , al l unveste d award s becom e full y veste d i n th e even t o f a Chang e i n Contro l o f th e Compan y a s define d i n th e Chang e i n Contro l Agreements . Unde r th e provision s o f th e Restricte d Stoc k Plan , dividend s o n unveste d share s ar e pai d t o th e awardee s quarterly .

Th e Compan y believe s eac h elemen t o f compensatio n an d th e Company’ s decision s regardin g suc h element s ar e consisten t wit h th e Company’ s overal l compensatio n objective s a s expresse d above . Th e Compan y believe s eac h elemen t o f compensatio n fo r th e Executiv e Officer s i s fai r an d reasonable . Suc h element s o f compensatio n wil l hel p enabl e th e Compan y t o maintai n a competitiv e compensatio n progra m amon g comparabl y size d utilitie s an d othe r firm s i n general .

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| SUMMARY
COM P ENSATION TABLE – 2008 — Name
and Principal Position | Year | Salary ($) | Bonus ($) | (1)
Stock Awards ($) | Option Awards ($) | Non-equity Incentive
Plan Compensation ($) | (2) Change
in Pension
Value and Non-Qualified Deferred Compensation Earnings ($) | (3) All
other Compensation ($) | Total ($) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Dennis
W. Doll, President
and | 2008 2007 | 352,574 326,746 | n/a n/a | 43,354 42,230 | n/a n/a | n/a n/a | 11,080 9,943 | 23,139 18,613 | 430,147 397,532 |
| Chief
Executive Officer | 2006 | 298,477 | n/a | 28,875 | n/a | n/a | 7,494 | 17,630 | 352,477 |
| A.
Bruce O’Connor, VP
and Chief | 2008 2007 | 204,316 195,116 | n/a n/a | 26,884 28,001 | n/a n/a | n/a n/a | 26,318 23,816 | 17,347 15,385 | 274,865 262,318 |
| Financial
Officer | 2006 | 188,488 | n/a | 24,063 | n/a | n/a | 25,824 | 15,920 | 254,295 |
| Ronald
F. Williams, VP
Operations and | 2008 2007 | 191,906 186,419 | n/a n/a | 16,919 17,171 | n/a n/a | n/a n/a | 40,373 37,389 | 17,411 15,088 | 266,609 256,067 |
| Chief
Operating Officer | 2006 | 180,969 | n/a | 19,250 | n/a | n/a | 39,836 | 14,484 | 254,539 |
| Richard
M. Risoldi, VP-Subsidiary
Operations | 2008 2007 | 171,464 165,181 | n/a n/a | 21,539 24,257 | n/a n/a | n/a n/a | 26,704 23,518 | 15,745 14,533 | 235,452 227,489 |
| | 2006 | 157,704 | n/a | 25,025 | n/a | n/a | 21,793 | 12,778 | 217,300 |
| Kenneth
J. Quinn, VP General Counsel, Secretary
and Treasurer | 2008 2007 | 156,222 149,646 | n/a n/a | 20,379 18,966 | n/a n/a | n/a n/a | 27,756 22,528 | 17,335 13,345 | 221,692 204,485 |
| | 2006 | 144,269 | n/a | 19,250 | n/a | n/a | 14,349 | 12,734 | 190,602 |

(1) Th e amount s i n thi s colum n reflec t th e valu e o f restricte d stoc k award s mad e o n Octobe r 1 , 2008 , Octobe r 1 , 200 7 an d Octobe r 2 , 2006 , respectively . Unde r th e Restricte d Stoc k Plan , however , thes e award s generall y d o no t ves t t o th e participant s unti l th e expiratio n o f fiv e year s fro m th e dat e o f suc h award . Durin g suc h five­yea r period , th e participant s hav e contingen t ownershi p o f suc h shares , includin g th e righ t t o vot e th e sam e an d t o receiv e dividend s thereon .

(2) Th e Compan y doe s no t hav e an y non­qualifie d deferre d compensatio n plan s o r relate d earnings .

(3) Th e detai l o f “Al l Othe r Compensation ” recognize d fo r th e benefi t o f th e Name d Executiv e Officer s i s se t fort h o n Schedul e A , a s supplementa l informatio n t o th e Summar y Compensatio n Table .

| SCHEDULE
- A | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| SUMMARY
- ALL OTHER COMPENSATION – 2008 | | | | | | | | | |
| | | Dividends on Restricted Stock | Personal Automobile Use | (4) Group Term
Life Insurance Premiums | Board Fees | (4) 401(K)
– Employer Match | Club Dues | Spouse Travel | Total
- All
Other Compensation |
| Name | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Dennis
W. Doll | 2008 | 3,263 | 3,070 | 2,408 | 4,800 | 8,050 | - | 1,548 | 23,139 |
| | 2007 | 1,633 | 3,070 | 792 | 4,800 | 7,700 | - | 618 | 18,613 |
| | 2006 | 464 | 3,070 | 859 | 4,800 | 7,700 | - | 738 | 17,631 |
| A.
Bruce O'Connor | 2008 2007 | 5,275 4,859 | 2,683 2,683 | 1,335 437 | - - | 7,161 6,829 | - - | 893 577 | 17,347 15,385 |
| | 2006 | 4,536 | 2,683 | 418 | - | 6,317 | 1,000 | 966 | 15,920 |
| Ronald
F. Williams | 2008 2007 | 4,095 4,090 | 3,289 3,289 | 2,322 1,185 | - - | 6,716 6,524 | - - | 989 - | 17,411 15,088 |
| | 2006 | 4,004 | 3,289 | 1,140 | - | 6,051 | - | - | 14,484 |
| Richard
M. Risoldi | 2008 2007 | 3,888 3,233 | 4,589 4,589 | 1,096 546 | - - | 6,012 5,781 | - - | 160 384 | 15,745 14,533 |
| | 2006 | 2,601 | 4,589 | 513 | - | 5,075 | - | - | 12,778 |
| Kenneth
J. Quinn | 2008 2007 | 3,037 2,274 | 4,934 4,934 | 2,834 900 | - - | 5,467 5,237 | - - | 1,063 - | 17,335 13,345 |
| | 2006 | 1,560 | 4,863 | 856 | - | 4,830 | - | 625 | 12,734 |

(4) Th e benefit s availabl e t o th e Name d Executiv e Officer s unde r thes e program s ar e als o availabl e t o al l othe r employee s o f th e Company .

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Table of Contents

| GRANTS
OF PLAN-BASED A W ARDS – 2008 | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | Estimated
Future Payouts Under
Non-equity Incentive
Plan Awards | | | Estimated
Future Payouts Equity
Incentive Plan
Awards | | | All
Other Stock | All
Other Option | |
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum (#) | Awards: Number of Shares
or Units (#) | Awards: Number
of Securities Underlying Options (#) | Exercise or
Base Price
of Option Awards ($/Sh) |
| Dennis
W. Doll | 10/1/2008 | n/a | n/a | n/a | n/a | n/a | n/a | 2,506 | n/a | n/a |
| A.
Bruce O'Connor | 10/1/2008 | n/a | n/a | n/a | n/a | n/a | n/a | 1,554 | n/a | n/a |
| Ronald
F. Williams | 10/1/2008 | n/a | n/a | n/a | n/a | n/a | n/a | 978 | n/a | n/a |
| Richard
M. Risoldi | 10/1/2008 | n/a | n/a | n/a | n/a | n/a | n/a | 1,245 | n/a | n/a |
| Kenneth
J. Quinn | 10/1/2008 | n/a | n/a | n/a | n/a | n/a | n/a | 1,178 | n/a | n/a |

| OUTSTANDING
EQUITY AW A RDS – 2008 | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Option
Awards | | | | | | Stock
Awards | | |
| Name | Number
of Securities Underlying Unexercised Options
(#) Exercisable (#) | Number
of Securities Underlying Unexercised Options
(#) Unexercisable (#) | Equity Incentive Plan Awards: Number
of Securities Underlying Unexercised Earned
Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units
of Stock
That Have
Not Vested (#) | Market Value of
Shares or Units
of Stock That Have Not Vested ($) | Equity
Incentive Plan
Awards: Number Of Unearned Shares, Units
or Other Rights
That Have
Not Vested (#) | Equity
Incentive Plan
Awards: Market
or Payout Value
of Unearned Shares,
Units or Other
Rights That Have
Not Vested ($) |
| Dennis
W. Doll | n/a | n/a | n/a | n/a | n/a | 6,517 | 112,288 | n/a | n/a |
| A.
Bruce O'Connor | n/a | n/a | n/a | n/a | n/a | 7,070 | 121,816 | n/a | n/a |
| Ronald
F. Williams | n/a | n/a | n/a | n/a | n/a | 5,227 | 90,061 | n/a | n/a |
| Richard
M. Risoldi | n/a | n/a | n/a | n/a | n/a | 5,665 | 97,608, | n/a | n/a |
| Kenneth
J. Quinn | n/a | n/a | n/a | n/a | n/a | 4,871 | 83,927 | n/a | n/a |

| OPTION
EXERCISES AND STOCK VESTED – 20 0 8 — Name | Option
Awards | | Stock
Awards | |
| --- | --- | --- | --- | --- |
| | Number
of Shares
Acquired on
Exercise (#) | Value
Realized on
Exercise ($) | Number
of Shares
Acquired on
Vesting (#) | Value Realized on
Vesting ($) |
| Dennis
W. Doll | n/a | n/a | - | - |
| A.
Bruce O’Connor | n/a | n/a | 1,600 | 27,680 |
| Ronald
F. Williams | n/a | n/a | 1,333 | 23,061 |
| Richard
M. Risoldi | n/a | n/a | 800 | 13,840 |
| Kenneth
J. Quinn | n/a | n/a | 333 | 5,761 |

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Table of Contents

| PENSION B ENEFITS – 2008 — Name | Plan | Number
of Years
Credited Service (#) | Present
Value of
Accumulated Benefit ($) | Payments
During Last
Fiscal Year ($) |
| --- | --- | --- | --- | --- |
| Dennis
W. Doll | MWC
Pension Plan | 4 | 34,764 | 0 |
| A.
Bruce O'Connor | MWC
Pension Plan | 19 | 174,278 | 0 |
| Ronald
F. Williams | MWC
Pension Plan | 14 | 248,333 | 0 |
| Richard
M. Risoldi | MWC
Pension Plan | 19 | 143,367 | 0 |
| Kenneth
J. Quinn | MWC
Pension Plan | 7 | 97,703 | 0 |

Al l employees , hire d befor e Apri l 1 , 2007 , includin g th e Executiv e Officers , wh o receiv e pa y fo r a minimu m o f 1,00 0 hour s durin g th e year , ar e include d i n th e Company’ s Qualifie d Define d Benefi t Pensio n Pla n (Qualifie d Plan) . *Unde r th e noncontributor y Qualifie d Plan , curren t servic e cost s ar e funde d annuall y a s allowe d unde r Interna l Revenu e Servic e guidelines . Th e Company’ s annua l contributio n i s determine d o n a n actuaria l basis . Benefit s ar e measure d fro m th e member’ s entr y dat e an d accru e t o norma l retiremen t dat e o r dat e o f earl y retirement . Benefit s ar e calculated , a t norma l retirement , a t 1.25 % o f pa y u p t o th e employee’ s Socia l Securit y benefi t integratio n level , plu s 1.9 % o f suc h exces s pay , multiplie d b y anticipate d tota l yea r o f servic e t o norma l retiremen t date , cappe d a t 3 5 year s o f suc h exces s pay , multiplie d b y year s o f servic e achieve d an d no t to excee d numbe r o f year s o f servic e achieve d a t norma l retiremen t dat e o f ag e 65. Averag e pa y i s th e highes t annua l averag e o f tota l pa y durin g an y 5 consecutiv e year s withi n th e 1 0 calendar ­yea r perio d prio r t o norma l retiremen t date . Th e benefi t amount s ar e no t subjec t t o an y deductio n fo r Socia l Securit y benefit s o r othe r offse t amounts .

Ronal d F . William s an d Kennet h J . Quin n ar e currentl y eligibl e t o receiv e earl y retiremen t benefit s unde r th e Qualifie d Pla n i n th e even t eithe r o f thes e tw o Name d Executiv e Officer s retires . I f eithe r electe d t o receiv e earl y retiremen t benefits , suc h benefit s woul d b e a t a reduce d leve l a s define d unde r th e Qualifie d Pla n fo r an y eligibl e employe e wh o elect s earl y retirement . N o othe r Name d Executiv e Office r ha s reache d th e minimu m ag e an d servic e requirement s t o receiv e earl y retiremen t benefit s unde r th e Retiremen t Plan . N o lum p su m paymen t o f accumulate d retiremen t benefit s i s provide d unde r th e Plan .

*Employee s hire d afte r Marc h 31 , 200 7 ar e no t eligibl e t o participat e i n th e Qualifie d Plan , bu t d o participat e i n a define d contributio n pla n tha t provide s a n annua l contributio n a t th e discretio n o f th e Compan y base d upo n a percentag e o f th e participants ’ compensation .

| DIRECTOR
COMPENS A TION – 2008 — Name | Fees Earned or Paid
in Cash ($) | Stock
Awards ($) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Change
in Pension Value and
Non- qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Annette
Catino | 29,950 | n/a | n/a | n/a | n/a | n/a | 29,950 |
| John
C. Cutting | 32,600 | n/a | n/a | n/a | n/a | n/a | 32,600 |
| John
R. Middleton, M.D. | 28,800 | n/a | n/a | n/a | n/a | n/a | 28,800 |
| Stephen
H. Mundy | 6,000 (1) | n/a | n/a | n/a | n/a | n/a | 6,000 |
| John
P. Mulkerin | 32,600 | n/a | n/a | n/a | n/a | n/a | 32,600 |
| Walter
G. Reinhard | 30,700 | n/a | n/a | n/a | n/a | n/a | 30,700 |
| Jeffries
Shein | 30,800 | n/a | n/a | n/a | n/a | n/a | 30,800 |
| J.
Richard Tompkins | 74,700 | n/a | n/a | n/a | n/a | n/a | 74,700 |

(1) Mr . Mund y wa s pai d a fe e o f $6,00 0 fo r hi s service s i n 200 8 a s Directo r Emeritus . Mr . Mundy’ s service s a s Directo r Emeritu s ende d a s o f Decembe r 31 , 200 8 an d theref ore , n o furthe r paymen t i s du e Mr . Mundy .

Note : Denni s W . Doll , wh o i s als o a director , doe s no t appea r o n thi s tabl e sinc e hi s directo r compensatio n appear s i n th e “Al l Othe r Compensation ” colum n o f th e Summar y Compensatio n Table .

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Table of Contents

DIRECTORS ’ A NNUA L RETAINE R AN D MEETIN G FEE S

Fo r 2008 , Middlese x Wate r Compan y pai d eac h o f th e Boar d member s wh o ar e no t employe d b y th e Compan y (“outsid e Directors” ) a n annua l retaine r o f $12,000 . A s a resul t o f a stud y regardin g directo r compensatio n conducte d b y a nationa l compensatio n consultin g firm , effectiv e Jul y 1 , 2008 , th e annua l retaine r o f $12,00 0 wa s increase d t o $15,00 0 pe r annum , an d th e additiona l $3,00 0 pe r outsid e Directo r shal l b e i n th e for m o f commo n st oc k o f th e Compan y unde r th e Outsid e Directo r Stoc k Compensatio n Plan . Th e awar d o f s uc h stoc k wil l tak e plac e i n 2009 . I n addition , th e Chairma n o f th e Boar d received a Chairman’ s retaine r i n th e annua l amoun t o f $50,000 .

Th e Boar d meetin g fee s fo r outsid e Director s amounte d t o $80 0 pe r Directo r fo r eac h Boar d meetin g attended . Th e Boar d meetin g fe e fo r Boar d member s wh o ar e employe d b y th e Compan y (“insid e Directors” ) amounte d t o $40 0 pe r meetin g

Th e Boar d committe e meetin g fee s fo r outsid e Director s amounte d t o $50 0 pe r Directo r fo r eac h Boar d committe e meetin g attende d throug h Jun e 30 , 2008 . Additionally , eac h Committe e Chairperso n i s pai d a n annua l fe e o f $1,000 , whic h i s generall y pai d i n Octobe r o f eac h year . I n th e even t tha t a Specia l Boar d o r a Specia l Committe e meetin g vi a teleconferenc e wer e t o b e held , th e meetin g fee s fo r outsid e Director s ar e $40 0 an d $20 0 pe r meeting , respectively .

Also , i n accordanc e wit h th e above­reference d study , effectiv e Jul y 1 , 2008 , th e Boar d meetin g fee s increase d fro m $80 0 t o $90 0 fo r outsid e Directors ; Boar d Committe e meetin g fee s increase d fro m $50 0 t o $75 0 fo r outsid e Directors ; th e Audi t Committe e Chairperso n retaine r increase d fro m $1,00 0 t o $2,50 0 annually ; th e Compensatio n Committe e Chairperso n retaine r increase d fro m $1,00 0 t o $2,00 0 annually ; al l othe r Committe e Chairperso n retainer s increase d fro m $1,00 0 t o $1,500 . Th e Chairma n o f th e Board’ s retaine r remaine d unchanged .

CHANG E I N CO N TRO L AGREEMENT S

Th e Compan y ha s Chang e i n Contro l Agreement s wit h th e Name d Executiv e Officer s an d othe r Executiv e Officer s o f th e Company . Thes e agreement s generall y provid e tha t i f th e executiv e i s terminate d b y th e Company , othe r tha n fo r death , disability , retirement , caus e (a s define d i n th e agreement) , o r i f th e executiv e resign s fo r Goo d Reaso n (a s define d i n th e agreement ) withi n thre e (3 ) year s afte r a Chang e I n Contro l o f th e Compan y a s define d i n th e agreement , th e executiv e i s entitle d t o receive , (a ) a lum p su m severanc e paymen t equa l t o thre e (3 ) time s th e executive’ s averag e tota l compensatio n fo r the fiv e (5 ) year s prio r t o th e termination ; (b ) continue d coverag e fo r thre e (3 ) year s unde r an y healt h o r welfar e pla n i n whic h th e executiv e an d th e executive’ s depend ent s wer e participating ; an d (c ) a n additiona l amoun t equa l t o th e amoun t o f federa l Excis e Tax , i f any , tha t i s du e o r determine d t o b e du e resultin g fro m th e severanc e pay ment s o r an y othe r payment s unde r th e agreement . Th e benefit s unde r an y healt h o r wel far e benefi t pla n coul d en d earlie r tha n thre e (3 ) year s fro m th e dat e o f termination an d woul d en d o n th e earlie r t o occu r o f (i ) th e dat e th e executiv e become s covere d b y a ne w employer’ s healt h an d welfar e benefi t plan , o r (ii ) th e dat e th e executiv e become s covere d b y Medicare . Also , coverag e fo r th e executive’ s dependent s coul d en d earlie r tha n an y o f thes e date s i f require d b y th e healt h o r welfar e benef i t pla n du e t o ag e eligibility .

I n additio n t o th e benefit s t o b e pai d t o th e executiv e a s note d abov e o n o r befor e th e thir d anniversar y o f th e Chang e i n Control , th e Compan y shal l pa y th e executiv e an y deferre d compensation , including , bu t no t limite d to , deferre d bonuse s allocate d o r credite d t o th e executiv e a s o f th e dat e o f termination . Also , an y outstandin g restricte d stoc k grant s awarde d t o th e executiv e unde r th e Company’ s stoc k plans , whic h ar e no t veste d o n termination , shal l immediatel y vest .

A Change in Control may also lead to the payment of benefits to the Named Executive Officers and other Executive Officers, who are participants under the Company’s Supplemental Executive Retirement Plan (“SERP”). Under the SERP, if an executive leaves the Company’s employ, under the terms of a Change In Control agreement within five years of the Change In Control under any of the following circumstances: (a) the executive’s employment with the Company is terminated by the Company other than for cause; (b) the nature and scope of the executive’s duties or activities with the Company or its successor are reduced to a level significantly below that which the executive had enjoyed immediately prior to the Change in Control; or (c) the executive’s base salary is reduced; or (d) if the Change in Control is preceded by the Company terminating the executive’s employment with the Company without cause during the six month period prior to the occurrence of the Change in Control, the executive shall be entitled to receive an annual retirement benefit equal to 75% of the executive’s Compensation (and in some cases, 50% of Compensation) reduced by certain other benefits as more particularly set forth in the SERP. Such annual retirement benefits shall commence within sixty days after the later of (a) the executive’s Normal Retirement Date, or (b) the executive’s retirement or termination of employment with the Company or its successor. Unless the executive elects and receives approval of an alternative form of payment under the SERP, the executive shall receive the annual retirement benefit each year for fifteen years payable in monthly installments.

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Table of Contents

Notwithstandin g th e foregoing , i f a n executiv e leave s th e Company’ s emplo y unde r th e term s o f a Chang e I n Contro l agreemen t an d withi n th e tim e fram e an d fo r th e reason s discusse d above , then , a t th e executive’ s sol e option , th e executiv e ma y elec t t o receiv e a reduce d benefi t equa l t o 75 % o f th e executive’ s Compensatio n (an d i n som e cases, 50 % o f Compensation ) reduce d b y certai n othe r benefit s a s prorate d a s se t fort h in th e SERP . Suc h benefi t shal l commerc e withi n sixt y day s afte r th e executiv e terminate s employmen t wit h th e Compan y o r it s successor .

Th e followin g tabl e indicate s th e potentia l valu e th e Name d Executiv e Officer s woul d receiv e i n connectio n wit h terminatio n b y th e Compan y withi n thre e year s afte r a Chang e i n Contro l o f th e Company . Al l scenario s us e Decembe r 31 , 2008 , th e las t busines s da y o f th e Company’ s las t complete d fisca l year , a s th e dat e fo r th e triggerin g even t se t fort h i n th e schedule . Additionally , th e potentia l value s t o eac h o f th e Name d Executiv e Officer s als o includ e th e presen t valu e o f accumulate d benefit s unde r th e SER P assuming tha t eac h Name d Executiv e Office r mad e a n electio n t o receiv e suc h benefit s withi n si xt y day s afte r th e executiv e terminate s employmen t wit h th e Compan y o r it s successor .

| Name | Compensation
paid during
calendar year
2008 (using
definition of “Compensation”
under the
Agreement) | Termination Before
Third Anniversary
(1) |
| --- | --- | --- |
| Dennis
W. Doll | $373,919 | $1,950,797 |
| A.
Bruce O’Connor | $224,645 | $1,020,479 |
| Ronald
F. Williams | $207,863 | $1,133,242 |
| Richard
M. Risoldi | $185,666 | $
860,388 |
| Kenneth
J. Quinn | $169,649 | $
900,217 |

(1) Compensation an d othe r benefit s pai d followin g terminatio n o n o r befor e th e thir d anniversar y o f th e Chang e i n Control .

COMPENSATIO N COMMITTE E IN T ERLOCK S AN D INSIDE R PARTICIPATIO N

Th e member s o f th e 200 8 Compensatio n Committe e wer e Annett e Catino , Joh n R . Middleton , M.D. , an d Jeffrie s Shein . Durin g 2008 , n o membe r o f th e Compensatio n Committe e wa s a n office r o r employe e o f th e Compan y o r a subsidiary .

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Table of Contents

COMPENS A TIO N COMMITTE E REPOR T

Th e Compensatio n Committe e o f th e Boar d o f Director s administer s th e compensatio n progra m fo r th e Name d Executiv e Officer s an d th e othe r executiv e officer s o f th e Compan y (hereinafter , collectivel y referre d t o a s th e “Executiv e Officers”) . Th e Committe e fo r th e yea r 200 8 wa s compose d o f thre e independen t Directors : Annett e Catino , Joh n R . Middleton , M.D. , an d Jeffrie s Shein . Th e Committe e i s responsibl e fo r settin g an d administerin g th e policie s tha t gover n annua l bas e compensatio n an d incentiv e compensation . Th e ful l Boar d o f Director s approve s policie s an d recommendation s develope d b y th e Committee . Th e Compensatio n Committe e annuall y review s an d adopt s it s Charte r whic h i t the n recommend s fo r adoptio n b y th e Boar d o f Directors . Th e Boar d o f Director s ha s adopte d a writte n Charte r fo r th e Compensatio n Committee , whic h i s availabl e o n th e Company’ s websit e a t www.middlesexwater.com .

Th e Company’ s compensatio n objective s an d policie s applicabl e t o th e executiv e officer s see k t o incen t th e advancemen t o f thre e corporat e prioritie s whic h ar e desirabl e an d necessar y fo r th e Compan y t o achiev e it s expresse d visio n an d strateg y i n th e creatio n o f lon g-ter m shareholde r value . Thos e corporat e prioritie s ar e (1 ) profitabl e growth ; (2 ) operationa l excellence ; an d (3 ) developin g th e technica l an d managemen t skill s o f th e Compan y employees . I n orde r t o achiev e th e visio n o f th e Company , an d execut e th e strategie s neede d t o achiev e tha t vision , th e Company’ s compensatio n an d benefit s program s ar e designe d t o (a ) attrac t an d retai n qualifie d executives ; (b ) suppor t shor t an d long-ter m goal s an d objective s o f th e Company ; an d (c ) appropriatel y rewar d individual s fo r thei r contributio n t o th e Company’ s success . Thes e program s ar e directl y relate d t o th e creatio n o f valu e fo r shareholder s throug h progres s i n th e thre e corporat e prioritie s liste d above .

Th e Committe e meet s wit h th e Chie f Executiv e Office r t o revie w hi s evaluatio n o f th e performanc e o f th e othe r executiv e officer s an d meet s wit h th e Chie f Executiv e Office r t o evaluat e hi s performance . Th e Committe e report s o n al l executiv e evaluation s t o th e ful l Boar d o f Directors .

Bas e salar y level s ar e reviewe d annuall y an d ar e benchmarke d agains t othe r companies , bot h utilitie s an d non­utilities , a t th e Stat e an d nationa l levels . Independen t salar y studie s ar e periodicall y conducte d wit h th e assistanc e o f a n outsid e consultan t retaine d b y th e Committee . Salarie s fo r satisfactor y performanc e ar e targete d a t th e media n o f th e competitiv e market . Individua l performanc e o f eac h executive i s give n appropriat e consideratio n whe n settin g salarie s agains t th e competitiv e marke t data .

I n lat e 2007 , th e Compensatio n Committe e retaine d th e service s o f a nationa l executiv e compensatio n consultin g fir m t o conduc t a stud y wit h respec t t o th e executiv e compensatio n an d th e directo r compensatio n pai d b y th e Company . Th e impac t o f an y o f th e consultant’ s recommendation s tha t wer e adopte d i n 200 8 ma y b e foun d i n th e Summar y Compensatio n Tabl e – 200 8 herein , whil e th e impac t o n directo r compensatio n ma y b e foun d i n th e sectio n entitle d “Directors ’ Annua l Retaine r an d Meetin g Fees. ”

Th e factor s an d criteri a upo n whic h th e Chie f Executiv e Officer’ s compensatio n i s base d generall y includ e thos e discusse d wit h respec t t o th e othe r executiv e officers . I n addition, th e Compensatio n Committe e examine s th e effectivenes s wit h whic h th e CE O i s managin g th e performanc e o f th e executiv e team . Amon g th e criteri a t o b e use d fo r evaluatio n ar e th e following : (a) Financia l – t o revie w th e establishmen t an d achievemen t o f appropriat e shor t an d long­ter m financia l objective s fo r th e Company . (b ) Operationa l – t o determin e tha t appropriat e policies , procedures , processe s an d program s hav e bee n establishe d an d implemente d s o th e Compan y i s complian t unde r relevan t regulator y policie s an d tha t opportunitie s an d vulnerabilitie s ar e appropriatel y managed ; t o ensur e th e developmen t o f effectiv e recruitment , training , retentio n an d successio n plans ; t o ensur e th e Compan y i s bot h developin g an d executin g initiative s o n a timel y basis ; t o promot e efficienc y an d continuou s improvemen t s o result s ar e tie d t o th e strategi c pla n an d budge t tha t ar e focuse d o n increase d shareholde r value , th e qualit y o f servic e deliver y an d employe e satisfaction ; an d (c ) Leadershi p – t o ensur e th e CE O i s leadin g th e Compan y an d settin g strategie s an d philosophie s tha t ar e wel l understood , widel y supported , consistentl y applie d an d effectivel y implemente d an d whic h includ e settin g standard s fo r stron g safet y an d ethica l compliance .

Th e Compensatio n Committe e ha s reviewe d an d discusse d th e Compensatio n Discussio n an d Analysi s wit h managemen t o f th e Company . Base d o n th e revie w an d discussions , th e Compensatio n Committ e e ha s recommende d t o th e Boar d o f Director s tha t th e Compensatio n Discussio n an d Analysi s b e include d i n th e Company’ s Prox y an d incorporate d b y referenc e int o th e Company’ s annua l repor t o n For m 10-K .

| Year
2009 Compensation Committee |
| --- |
| Jeffrie s Shein , Chairma n |
| Annett e Catin o |
| Joh n R . Middleton , M.D . |

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AUDI T COMMI T TE E REPOR T

Th e Audi t Committe e o f th e Boar d o f Director s i s compose d o f fou r independen t directors , on e o f who m i s designate d b y th e Boar d a s th e “Audi t Committe e Financia l Expert, ” a s define d b y th e Securitie s an d Exchang e Commission . Th e Committe e fo r th e yea r 200 8 wa s compose d of : Annett e Catino , Joh n C . Cutting , Joh n R . Middleton , M.D . an d Joh n P . Mulkerin . Th e Audi t Committe e operate s unde r a writte n Charte r adopte d b y th e Boar d o f Director s an d i s reviewe d an d adopte d annuall y b y th e Committe e an d th e Boar d o f Directors . Th e Charte r i s availabl e o n th e Company’ s websit e a t www.middlesexwater.com .

Managemen t i s responsibl e fo r th e Company’ s financia l statement s an d interna l controls . Th e Company’ s independen t accountants , Bear d Mille r Company , LLP , ar e responsibl e fo r performin g a n independen t audi t o f th e Company’ s annua l consolidate d financia l statement s i n accordanc e wit h th e standard s o f th e Publi c Compan y Accountin g Oversigh t Boar d (Unite d States ) an d fo r issuin g a repor t thereon . Th e Committee’ s responsibilit y i s t o overse e th e qualit y an d integrit y o f th e Company’ s accounting , auditin g an d financia l reportin g practices .

I n thi s context , th e Committe e ha s me t an d hel d discussion s wit h managemen t an d th e independen t accountants . Managemen t represente d t o th e Committe e tha t th e Company’ s consolidate d fi nancia l statement s wer e prepare d i n accordanc e wit h generall y accepte d accountin g principles , an d th e Committe e ha s reviewe d an d discusse d th e consolidate d audite d financia l statement s wit h managemen t an d th e independen t accountants . Th e Committe e discusse d wit h th e independen t accountant s th e matter s require d t o b e disc usse d b y Statemen t o n Auditin g Standard s No . 61 , a s amende d (Communicatio n wit h Audi t Committees) , whic h includes , amon g othe r things :

· Change s i n significan t accountin g policies ;

· Th e proces s use d b y managemen t i n formulatin g accountin g estimate s an d th e basi s fo r th e auditors ’ conclusion s regardin g th e reasonablenes s o f thes e estimates ;

· Disagreements , i f any , wit h managemen t ove r th e applicatio n o f accountin g principles ;

· Audit adjustments; and

· Disclosure s i n th e financia l statements .

Th e independen t accountant s als o provide d t o th e Committe e th e writte n disclosure s require d b y Independenc e Standard s Boar d Standar d No . 1 (Independenc e Discussion s wit h Audi t Committees) , an d th e Committe e discusse d wit h th e independen t accountant s th e firm’ s independenc e wit h respec t t o Middlese x Wate r Compan y an d it s management . Th e Committe e ha s th e sol e authorit y t o pre­approv e permitte d non­audi t Compan y service s performe d b y th e independen t accountant s an d ha s considere d whethe r th e independen t accountants ’ provisio n o f non­audi t service s t o th e Compan y i s compatibl e wit h maintainin g thei r independence .

Base d o n th e Committee’ s discussion s wit h managemen t an d th e independen t accountants , th e Committee’ s revie w o f th e audite d financia l statements , th e representation s o f managemen t regardin g th e audite d financia l statement s an d th e repor t o f th e independen t accountant s t o th e Committee , th e Committe e recommende d t o th e Boar d o f Director s tha t th e audite d financia l statement s b e include d i n th e Company’ s Annua l Repor t o n For m 10­ K fo r th e fisca l yea r ende d Decembe r 31 , 2008 , fo r filin g wit h th e Securitie s an d Exchang e Commission .

Th e Committe e als o discusse d wit h managemen t th e proces s use d fo r th e establishmen t an d maintenanc e o f disclosur e control s an d procedure s i n quarterl y an d annua l report s whic h i s require d b y th e Securitie s an d Exchang e Commissio n (SEC ) an d th e Sarbanes­Oxle y Ac t o f 200 2 fo r certai n o f th e Company’ s filing s wit h th e SEC .

Th e Committe e me t privatel y wit h th e independen t auditor s wh o hav e unrestricte d acces s t o th e Audi t Committee .

Yea r 200 9 Audi t Committe e
Joh n P . Mulkerin , Chairma n
Annett e Catin o
Joh n C . Cuttin g
Joh n R . Middleton , M. D

18

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INDEPENDEN T REGISTERE D PUBLI C ACCOUNTIN G FIR M FEE S

Bear d Mille r Compan y LL P ha s bee n approve d an d appointe d b y th e Audi t Committe e a s th e Company’ s independen t registere d accountin g firm . Aggregat e fee s bille d t o th e Compan y fo r th e year s endin g Decembe r 31 , 200 8 an d 200 7 b y Bear d Mille r Compan y LL P ar e a s follows :

| | Year
Ended December 31, — 2008 | 2007 |
| --- | --- | --- |
| Audit
Fees (a) | $ 330,200 | $ 306,715 |
| Audit-Related
Fees | — | — |
| Total
audit and audit-related fees | $ 330,200 | $ 306,715 |
| Tax
Fees (b) | $ 14,350 | $ 13,650 |
| All
Other Fees | — | — |
| Total
Fees | $ 344,550 | $ 320,365 |

(a) I n 200 8 an d 2007 , audi t fee s wer e incurre d fo r audit s o f th e financia l statement s and interna l contro l ove r financia l reportin g o f th e Company , a n audi t o f th e financia l statement s o f a subsidiar y o f th e Company , an d review s o f th e financia l statement s include d i n th e Company’ s quarterl y report s o n For m 10­Q . Als o i n 2008 , th e audi t fee s includ e $4,02 5 fo r service s rendere d i n connectio n wit h th e issuanc e o f a Consen t o n For m S­8 .

(b) Include s 200 8 an d 200 7 fee s fo r th e preparatio n o f ta x return s o f $14,35 0 an d $13,650 , respectively .

Th e Compan y pai d Withu m Smit h + Brow n LL P $21,60 0 an d $21,35 2 i n fee s durin g 200 8 an d 2007 , respectively , fo r th e audit s o f th e Company’ s employe e benefi t plans .

Th e Audi t Committe e ha s establishe d pre­approva l policie s an d procedure s fo r al l audi t an d non­audi t service s t o b e performe d b y Bear d Mille r Compan y LLP . Th e Audi t Committe e approve s 100 % o f th e service s relate d t o Audit­Relate d Fees , Ta x Fee s an d Al l Othe r Fee s i n exces s o f $5,000 .

INDEPENDEN T REGISTERE D PUBLI C A CCOUNTIN G FIR M

ATTENDANC E A T ANNUA L MEETIN G

Representative s o f Bear d Mille r Compan y LL P wil l b e presen t a t th e meetin g an d wil l b e afforde d a n opportunit y t o mak e a statement , i f the y s o desire , an d t o respon d t o appropriat e questions .

19

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STOCKHOLDE R PROPOSAL S

Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with regulations of the Securities and Exchange Commission. Should a shareholder intend to present a proposal at the annual meeting to be held in the year 2010, you must submit your proposal to the Secretary of the Company at 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830­-0452, not later than December 11, 2009, in order to be considered for inclusion in the Company’s proxy statement and form of proxy relating to the 2010 Annual Meeting.

OTH E R MATTER S

The management of the Company does not intend to bring any other matters before the meeting and has no reason to believe any will be presented to the meeting. If, however, other matters properly do come before the meeting, it is the intention of the persons named in the accompanying proxy to vote in accordance with their judgment in such matters.

MINUTE S O F 200 8 MEETIN G O F STOCKHOLD E R S

The minutes of the 2008 meeting of Shareholders will be submitted at the meeting for the correction of any errors or omissions but not for the approval of the matters referred to therein.

| By
Order of the Board of Directors |
| --- |
| ● |
| KENNETH
J. QUINN |
| Vice
President, General
Counsel, |
| Secretary
and Treasurer |

Iselin, New Jersey

April 8, 2009

Th e Compan y i s subjec t t o th e informationa l requirement s o f th e Securitie s Exchang e Ac t o f 193 4 an d file s a n Annua l Repor t o n For m 10- K wit h th e Securitie s an d Exchang e Commission . Additiona l copie s o f th e 200 8 Annua l Repor t o n For m 10- K file d b y th e Company , includin g th e financia l statement s an d schedules , bu t withou t exhibits , ca n b e maile d withou t charg e t o an y shareholders . Th e exhibit s ar e obtainabl e fro m th e Compan y upo n paymen t o f th e reasonabl e cos t o f copyin g suc h exhibits . Th e 200 8 Annua l Repor t o n For m 10­- K ca n als o b e foun d o n th e Compan y websit e a t www.middlesexwater.com . Shareholder s ca n reques t thi s informatio n b y phon e a t 732­-634-­1500 , ext . 1216 , e-mai l kquinn@middlesexwater.co m o r b y mai l t o Kennet h J . Quinn , Vic e President , Genera l Counsel , Secretar y an d Treasurer , Middlese x Wate r Company , 150 0 Ronso n Road , P.O . Bo x 1500 , Iselin , Ne w Jerse y 08830-0452 .

20

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150 0 Ronso n Roa d

Iselin , Ne w Jerse y 08830­-045 2

732-­634-­150 0

www.middlesexwater.co m

DIRECTION S T O MID D LESE X WATE R COMPAN Y

FROM GARDEN STATE PARKWAY (NORTH OR SOUTH): Take Exit 131A to fourth traffic light. Turn right onto Middlesex-Essex Turnpike and proceed (about 1/2 mile) to third traffic light (Gill Lane). Turn right and go (about 1 mile) under railroad underpass and make right onto Ronson Road. Proceed past three large mirror-sided office buildings on the right. At the sign, make a right into Middlesex Water Company.

FROM NEW JERSEY TURNPIKE (NORTH OR SOUTH): Take Exit 11 onto the Garden State Parkway North and follow above directions.

FROM US ROUTE NO. 1 (NORTH OR SOUTH): Proceed to the Woodbridge Center area and follow signs to Gill Lane. When on Gill Lane, make left turn onto Ronson Road and follow above directions.

21

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150 0 Ronso n Roa d

Iselin , Ne w Jerse y 08830-­045 2

732-634-150 0

www.middlesexwater.co m

Table of Contents

1500 RONSON ROAD ISELIN, NJ 08830 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Middlesex Water Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Middlesex Water Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

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| MDLSX1 | KEEP
THIS PORTION FOR YOUR RECORDS |
| --- | --- |
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| --- | --- | --- | --- | --- | --- |
| The
Board of Directors recommends a vote"FOR" Item 1. Vote
on Directors | o | o | o | | |
| 1. | ELECTION
OF DIRECTIONS | | | | |
| | Nominees
for Class I Directors term expiring in 2012 are: | | | | |
| | 01)John
C. Cutting 02)John
P. Mulkerin 03)Dennis
W. Doll | | | | |
| 2. | In
their discretion, upon such other matters that may properly come before
the meeting or any adjournment or adjournments thereof. | | | | |
| The
shares represented by this proxy, when properly executed, will be voted in
the manner directed herein by the undersigned Stockholder(s). If no direction is made, this
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Table of Contents

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

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MDLSX2

| THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL
MEETING OF SHAREHOLDERS MAY
20, 2009 The
shareholder(s) hereby appoint(s) John R. Middleton, M.D., and J. Richard
Tompkins, or either of them, as proxies, each with the power to appoint
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Table of Contents

| MIDDLESEX
WATER COMPANY | Shareholder
Meeting to be held on May 20, 2009 |
| --- | --- |
| **
IMPORTANT NOTICE ** | Proxy
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| Regarding
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Table of Contents

| Meeting
Information — Meeting
Type: | Annual | How
To Vote | Vote
In Person |
| --- | --- | --- | --- |
| Meeting
Date: Meeting
Time: For
holders as of: | May
20, 2009 11:00
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| Meeting
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NJ 08830 | | | |
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Table of Contents

Voting items

The Board of Directors recommends a vote "FOR" Item 1.

1. ELECTION OF DIRECTORS

Nominees for Class I Directors term

expiring in 2012 are:

01) John C. Cuttin g

02) John P. Mulkeri n

03) Dennis W. Dol l

1. In their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof.